Article ID: | iaor200926529 |
Country: | United States |
Volume: | 17 |
Issue: | 4 |
Start Page Number: | 392 |
End Page Number: | 414 |
Publication Date: | Dec 2006 |
Journal: | Information Systems Research |
Authors: | Pavlou Paul A, Dimoka Angelika |
Keywords: | bidding, retailing, behaviour |
For online marketplaces to succeed and prevent a market of lemons, their feedback mechanism (reputation system) must differentiate among sellers and create price premiums for trustworthy sellers as returns to their reputation. However, the literature has solely focused on numerical (positive and negative) feedback ratings, alas ignoring the role of feedback text comments. These text comments are proposed to convey useful reputation information about a seller's prior transactions that cannot be fully captured with crude numerical ratings. Building on the economics and trust literatures, this study examines the rich content of feedback text comments and their role in building a buyer's trust in a seller's benevolence and credibility. In turn, benevolence and credibility are proposed to differentiate among sellers by influencing the price premiums that a seller receives from buyers.